Cathepsin K is a recently identified lysosomal cysteine proteinase. It is abundant in osteoclasts, where it is believed to play a vital role in the resorption and remodeling of bone. Pycnodysostosis is a rare inherited osteochondrodysplasia that is caused by mutations of the cathepsin-K gene, characterized by osteosclerosis, short stature, and acroosteolysis of the distal phalanges. With a view to delineating the role of cathepsin K in bone resorption, we generated mice with a targeted disruption of this proteinase. Cathepsin-K-deficient mice survive and are fertile, but display an osteopetrotic phenotype with excessive trabeculation of the bone-marrow space. Cathepsin-K-deficient osteoclasts manifested a modified ultrastructural appearance: their resorptive surface was poorly defined with a broad demineralized matrix fringe containing undigested fine collagen fibrils; their ruffled borders lacked crystal-like inclusions, and they were devoid of collagen-fibril-containing cytoplasmic vacuoles. Assaying the resorptive activity of cathepsin-K-deficient osteoclasts in vitro revealed this function to be severely impaired, which supports the contention that cathepsin K is of major importance in bone remodeling.